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HomeMy WebLinkAbout25-556 IckesPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Jesse J. Ickes Dear Mr. Ickes: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL December 12, 2025 25-556 This responds to your letter dated December 4, 2025, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the issue presented below: Issue: Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et sec ., would impose prohibitions or restrictions upon an individual who has served as a Member of Altoona City Council since 2020, who in a private capacity is an owner of a firm that is looking to purchase a building located in Altoona City, with regard to seeking financing for the purchase of the building through an investment fund that was created by Altoona City Council in 2022. Brief Answer: NO. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon the individual in his capacity as a Member of Altoona City Council rather than upon him in his private capacity. Therefore, Section 1103(a) would not prohibit the individual or his firm from seeking financing for the purchase of the building through the investment fund that was created during the individual's service as a Member of Altoona City Council. (Based upon the submitted fact that the investment fund was created at least three years prior to the time that the individual or his firm would seek financing for the purchase of the building, the individual's participation in the creation of the investment fund would not serve as a basis for a violation of Section 1103(a) of the Ethics Act.) Facts: Ickes, 25-556 December 12, 2025 Page 2 You request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows. You have served as a Member of Altoona City Council ("City Council") since 2020. In 2022, City Council created the Altoona Investment Fund (the "Investment Fund") to loan money to businesses locating into the City of Altoona ("City") and to provide favorable financing to attract investments in new ventures in the City. City Council partnered with the Altoona -Blair County Development Corporation (the "Development Corporation"), a private non-profit 501(c)(3) certified economic development corporation, for the administration of the Investment Fund and the provision of low interest loans to qualified borrowers. You have submitted copies of the Subrecipient Agreement between the City and the Development Corporation for the administration of the Investment Fund and of the Resolution of City Council that approved the Subrecipient Agreement effective April 11, 2022, both of which documents are incorporated herein by reference. Applications for loans from the Investment Fund go before the Development Corporation's Loan Review Committee, which reviews the applications and makes decisions on the applications based on the applicants' qualifications. The City Mayor also reviews the applications but does not have a vote on the approval of the applications. At no time does City Council have any involvement in reviewing applications or awarding loans from the Investment Fund. Since 2022, $5 million has been loaned from the Investment Fund to qualified borrowers, and the interest being paid on those loans is now being loaned to other qualified borrowers. In a private capacity, you are a business owner. Your firm ("the Firm") is now looking to purchase a building in the City, and during the course of working on financing terms with Altoona First Savings Bank, an option to partner with the Development Corporation for partial financing through a loan from the Investment Fund was offered. No sales agreement has yet been reached for the building nor has financing for the purchase been secured. You seek guidance as to whether the Ethics Act would impose any prohibitions or restrictions upon you with regard to seeking partial financing from the Investment Fund through the Development Corporation for the Firm's purchase of the building located in the City. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. Sections 1103(a) and 11030) of the Ethics Act provide: Ickes, 25-556 December 12, 2025 Page 3 § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) Voting conflict. -- Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three -member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. §§ 1103(a), 11030). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a Ickes, 25-556 December 12, 2025 Page 4 member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 65 Pa.C.S. § 1102. Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest" (i.e., the "de minimis exclusion" and the "class/subclass exclusion"), 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary (financial) benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. C'nnclnsinn_ In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member of City Council, you are a public official subject to the provisions of the Ethics Act. The Firm is a business with which you are associated in your capacity as an owner. Pursuant to Section 1103(a) of the Ethics Act, you generally would have a conflict of interest in matters before City Council that would financially impact you or the Firm. Ickes, 25-556 December 12, 2025 Page 5 Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon you in your public capacity as a Member of City Council rather than upon you in your private capacity. Therefore, Section 1103(a) would not prohibit you or the Firm from seeking partial financing from the Investment Fund through the Development Corporation for the Firm's purchase of the building located in the City. Based upon the submitted fact that the Investment Fund was created by City Council over three and one-half years before you or the Firm would seek financing for the purchase of the building, your participation in City Council's creation of the Investment Fund would not serve as a basis for a violation of Section 1103(a) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Respectfully, Bridget K. Guilfoyle Chief Counsel